Using a Discount Amortization Table (Straight Line)

Panamint Candy Company prepared the following amortization table for $500,000 of 5-year, 9.2% bonds issued and sold by Panamint on January 1, 2025, for $458,000:

Period	Cash Payment (Credit)	Interest Expense (Debit)	Discount on Bonds Payable (Credit)	Discount on Bonds Payable Balance	Carrying Value
At issue				42,000	458,000
06/30/25	$23,000	$27,200	$4,200	37,800	462,200
12/31/25	23,000	27,200	4,200	33,600	466,400
06/30/26	23,000	27,200	4,200	29,400	470,600
12/31/26	23,000	27,200	4,200	25,200	474,800
06/30/27	23,000	27,200	4,200	21,000	479,000
12/31/27	23,000	27,200	4,200	16,800	483,200
06/30/28	23,000	27,200	4,200	12,600	487,400
12/31/28	23,000	27,200	4,200	8,400	491,600
06/30/29	23,000	27,200	4,200	4,200	495,800
12/31/29	23,000	27,200	4,200	0	500,000

Required:

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1. Prepare the entry to recognize the sale of the bonds on January 1, 2025. If an amount box does not require an entry, leave it blank.

2025 Jan. 1	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Record issuance of bonds at discount

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2. Prepare the entry to recognize the first interest payment on June 30, 2025. If an amount box does not require an entry, leave it blank.

2025 June 30	CashDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableDiscount on Bonds PayableInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Bonds PayableCashInterest ExpenseInterest PayablePremium on Bonds Payable	- Select -	- Select -
	Record interest expense

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3. Determine the interest expense for these bonds that Panamint will report on its 2027 income statement. $fill in the blank

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4. Indicate how these bonds will appear in Panamints December 31, 2028, balance sheet.

Bonds payable:
9.2% Bonds, due 2029Bonds PayableDiscount on Bonds PayablePremium on Bonds PayableUnamortized Premium on Bonds Payable	$- Select -
Add: Discount on Bonds PayableAdd: Premium on Bonds PayableLess: Discount on Bonds PayableLess: Premium on Bonds Payable	- Select -	$- Select -